Trade openness, FDI, and income inequality: Evidence from sub-Saharan Africa

Xu C., Han M., Dossou T. A. M., Bekun F. V.

African Development Review, cilt.33, sa.1, ss.193-203, 2021 (SSCI) identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 33 Sayı: 1
  • Basım Tarihi: 2021
  • Doi Numarası: 10.1111/1467-8268.12511
  • Dergi Adı: African Development Review
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus, Academic Search Premier, ASSIA, International Bibliography of Social Sciences, Periodicals Index Online, ABI/INFORM, Business Source Elite, Business Source Premier, CAB Abstracts, EconLit, Geobase, PAIS International, Political Science Complete, Public Affairs Index, Sociological abstracts, Worldwide Political Science Abstracts
  • Sayfa Sayıları: ss.193-203
  • İstanbul Gelişim Üniversitesi Adresli: Evet

Özet

© 2021 African Development Bank (AFD).The motivation for this study stems from the United Nations Sustainable Development Goals (UN-SDGs) and their impact by 2030. The UN highlights 17 SDGs that address pertinent local and global issues, one of which—SDG-10—has been devoted to reducing inequality. This study investigates the nexus between trade openness, foreign direct investment (FDI), and income inequality in sub-Saharan Africa using panel data from 2000 to 2015 and the generalized method of moment (GMM) technique approach. The findings show that FDI and income have a negative, statistically significant relationship with income inequality, signifying that as FDI and income per capita increase, the level of income inequality decreases. However, trade openness, education, political stability, corruption, and rule of law have a positive, statistically significant relationship with inequality. This study, therefore, offers some recommendations that will help policymakers. First, develop good policies to attract more foreign investors, which will contribute to creating employment opportunities in the region. Second, create more infrastructures to provide good quality education. Third, implement a good policy to motivate local production which will contribute to creating jobs. Fourth, build a strong institution(s) to fight against corruption.